ESGmark® for TheLawyer.com
ESGmark® for TheLawyer.com - Clients Shouldn’t Wonder About Your ESG Credentials
1st November 2021
It’s just possible you’ve noticed that COP26 is on in Glasgow. Very few of the UK’s top law firms are likely to pass up this chance to trumpet their ESG knowhow and credentials. But are they doing enough to keep their own house, er, insulated from criticism and win the hearts and minds of clients?
A recent benchmarking study by ESG consultancy ESGMark of 20 large UK law firms, including Clifford Chance, Freshfields, Linklaters, Norton Rose Fulbright and Hogan Lovells suggests not.
The study found that while an overwhelming majority of these firms had ESG-related content on their websites and 65 per cent had an ESG-related service offering of some kind, just 35 per cent had dedicated ESG targets, such as pledging to reduce emissions. What’s more, only 15 per cent including Allen & Overy, Freshfields and Linklaters had clear, specific and quantitative goals as part of their targets highlighting what, when and how they would reduce emissions.
To put it even more simply, when it comes to ESG most law firms are not practising what they preach.
There is some obvious context here, particularly for lawyers. An expected tightening of legislation, particularly around the UN’s 17 sustainable development goals and prompted by COP26, will bring businesses such as law firms and their supply chains squarely into the crosshairs. Admittedly, law firms may not be the world’s biggest polluters but if anyone should be on top of these changes, and be seen to be, it’s lawyers.
A central tenet of ESG is transparency. ESGMark’s data seems to reveal a yawning gap between law firm talk and action. So even if firms are doing more than it appears from a relatively cursory glance at their websites, they’re doing a pretty second-rate job of letting clients (and potential clients) know.
Why is this a problem? Well, apart from the obvious it’s a lost opportunity commercially. A recent survey by McKinsey of C-suite leaders and investment professionals found that 83 per cent believe ESG programmes will contribute more shareholder value in five years than they do today. Which means law firms need to be on top of that trend by making ESG a priority now.
Of course, the marketing bumf on their sites suggests firms know this and are at least talking the talk. But that only goes so far. Increasingly, clients want guidance on ESG matters from advisers with first-hand experience. They want to know the experts they turn to are themselves reducing emissions and generally being good corporate citizens.
In other words, if you don’t do it, or do but lack the transparency to let the market know about it, clients will turn to someone else who will. Is that incentive enough?
With thanks to Matt Byrne at Centaur Media.
